Existing Companies Need Planning Too

Does your company have an annual strategic plan? Does your company develop an annual plan to polish its strategy, focus on main priorities, and manage its cash?

Every business needs to plan

Unfortunately, there is a myth that associates planning with start-ups. That’s particularly common in the United States. Because of that myth, inertia, putting out fires, and related reasons, a lot of businesses miss out on the opportunity to manage themselves a bit better.

As an owner or manager of a small or medium business, can you afford not to plan? Do you leave the annual plan for the large businesses, and let your business depend on reacting to events? Or do you want to plan for priorities, and manage your growth proactively. That’s a leading question, of course, the answer is obvious.

You could call it strategic plan, annual plan, operational plan; the name doesn’t matter as much as the management of it. While these kinds of plans are common in larger enterprises, they are surprisingly rare in small and medium business.

Benefits

Guide your growth: Your business will grow or not depending on a lot of different factors, including overall economic trends, location, specific market needs, hard work, and other elements. Businesses that plan do it to guide and influence their growth, so that they move proactively towards defined objectives rather than just reacting to business events.

Manage priorities: Strategy is focus. Allocate resources where they will do the most good. Work towards your strengths and away from your weaknesses. Develop the company by doing the most important things, according to your long-term objectives.

Assign responsibilities: A plan gives you a place to develop organizational responsibilities.

Track progress: Think of a plan as a business positioning device. With a plan, you can track your progress towards goals, measure results, and manage the business. Without a plan, how do you tell whether or not you are moving in the right direction. What do you measure against?

Plan for cash: Profits are not cash, and cash is not intuitive. You spend cash, you don’t spend profits. However, businesses don’t plan well for cash, and they need to. That may not sound strategic, but it is. It is also the core of an operations plan, and an annual plan. Whatever else, you have to plan for cash.

Main elements

Regardless of the name you use, strategic plan or annual plan or operational plan, the vast majority of these plans include some or all of the following main points:

High-level strategy: Strategy is focus. It guides your growth. Strategy assigns priorities. Of the whole range of possible market segments, and the whole range of services and possible sales and marketing activities, which are your main priorities? Strategy is often a matter of understanding when and how to say no, selecting opportunities.

Specific responsibilities, activities, deadlines, and budgets: We call these milestones. They are the bricks and mortar of business planning, critical to business success.

Financial plan: One of the most important gains from an annual plan is the financial plan, which of course hinges on cash flow. A business needs to stress its priorities by making sure they get the right amount of money. Growth costs cash.

(Author’s note: This is a special labor-of-love article for me. As I write this additional note, months after this article was first published, I have become steadily more concerned about the negative impact of that myth of the start-up business plan in the second paragraph here. There’s a huge loss, because of that myth, for all those existing companies who fail to plan. Everybody running a company should have the benefit of planning. And, please note, it’s planning that matters, not the plan. Military genius and ex president Dwight Eisenhower once said: “the plan is useless, but planning is essential.” So what do you miss if you don’t have a working planning process in an existing company? You miss the opportunity to use that planning process to steer and manage your company, managing change, correcting the course, keeping the long-term objectives in mind.

The myth that planning is only for start ups is not restricted to the United State, In Nigeria it is not only a myth to plan ,but also that planning is only done when a business needs financial assistance from an investor or a bank or venture capitalist

stephen

Thank you this article .
Planning is necessary for all business entities let it be small or big , beginner or mature etc. “Failing to plan is planning to fail” , a business plan is a compass to give you in as to where you intend to go.

Stev

James K. Mugarura

Lovely Article! Planning is essential much as its hard to manage the plan itself especially in young businesses where you can’t easily predict the next priority! Cheers. James, sky estates ltd.

O.J

Keep on with such topics. we need a lot of advice on the existing business management

FRED AKPOMUJE

Wonderful article! it says it all, planning to the small business owner is like the oxygen and the blood within the body system, you are dead without it. FRED